In the wheat market, analysts have focused on the cold in the US. This could cause serious damage to winter wheat. In Europe, this new seems to have only a limited effect on the price. Soy is currently finding support due to the drought in Argentina. The problems there are now so great that the government is taking economic measures to keep the farms afloat.
The March contract for wheat on the Matif showed a minimum plus of €0,25 yesterday, reaching €287,75 per tonne. On the CBoT, wheat was stronger, rising 1,2% to $7.61¼ per bushel. Soy prices moved mainly sideways and corn lost 0,6% to close at $6.79¾ per bushel.
Cold weather in the US is supporting the wheat price in Chicago. Furthermore, the effect of the data on the status of winter wheat is still lingering on the American market. The condition of the crop has deteriorated considerably, especially in Oklahoma. Jordan has purchased 60.000 tons of wheat in a tender. According to traders, the wheat comes from the Black Sea region. The Egyptian state buyer GASC is also entering the wheat market again. GASC announced yesterday that a tender has been opened for the purchase of wheat. Brazil exported less wheat than expected. The Brazilian association of grain exporters Anec announced that 784.235 tons of wheat were exported in January. In last week's forecast, Anes assumed an export of 803.813 tons for January.
Drought kills
The soy market is mainly supported by reports from South America. The attaché of the US Department of Agriculture in Buenos Aires states that drought and heat have had a major impact. The first soy crop in particular (in parts of Argentina, two crops are grown in one growing year) has had a hard time. The recent rainfall means a postponement of execution for the soy crop, but the weather must be very good in February for the crop to really recover. The total soy harvest for the 2022/23 season is estimated by the attaché at 36 million tons. That's 9,5 million tons lower than the January edition of the USDA's Wasde report.
The Argentine Ministry of Economic Affairs is forced to set up a support program for farmers affected by drought. Minister Sergio Massa announces that he has 5 billion pesos (approximately €24,6 million) available for farmers in drought-affected regions. In addition, additional measures are being taken, such as temporary suspension of income tax, lower interest rates and additional subsidies. "I know that this does not fully meet the wishes, but this is what we can do," Massa wrote in a statement.
In Brazil, the USDA attaché expects a record grain harvest. The corn harvest for the 2022/23 season is estimated at 125,5 million tons. That is an increase of 8% compared to last season. A record harvest of 9,6 million tons is expected for wheat. Rice is less popular with Brazilian farmers. High cultivation costs and smaller margins deter farmers and the rice harvest is therefore 1,4% lower compared to last season.